Oil prices continued to rise after President Donald Trump's warning of imposing additional tariffs on any country purchasing Venezuelan crude. This move is part of the US government's strategy to target oil-producing nations.

The price of Brent crude increased for the fifth consecutive day, exceeding $73 per barrel and marking a more than 7% rise from its recent three-year low. Trump's directive against Venezuela could impact oil supplies to refineries in countries like China, India, Spain, and the US.

Despite Venezuela's oil output representing only about 1% of global production last year, the nation is a significant supplier of heavy, sour crude used for producing diesel and fuel oil. The shortage of heavy barrels in the market has led to them being traded at a premium compared to benchmark Brent futures.

The uncertainty created by Trump's trade policies has heightened market volatility, with futures dropping over 10% from their peak in mid-January. However, recent stability in global equity markets has alleviated some of this pressure. US crude futures are currently hovering near $70 a barrel, a level not seen since the beginning of the month.

Goldman Sachs analysts, including Daan Struyven, pointed out that if no exemptions are granted and the policy is enforced, importers might opt to stop buying Venezuelan oil to avoid potential secondary US sanctions. Additionally, recent sanctions on Iran's oil exports and an upturn in macroeconomic growth have contributed to supporting oil prices.

Although official imports of Venezuelan oil to China resumed in February 2024 after the easing of US sanctions, China had been unofficially receiving oil from Venezuela for years, often disguising it as bitumen mix, as per traders and third-party data providers.